FCA regulatory updates for; Funeral Plans, Buy now Pay Later, FCA approach to International Firms, further regulations for BNPL firms and FCA asks banks to Reconsider Bank branch closures
Review of pension advice allowance to take place
The Financial Advice and Market Review was commissioned in 2015 by the Financial Conduct Authority and the Treasury and was designed to improve access to financial advice. In some respects, the Review has ‘been and gone’, with the FCA having already published its assessment of its effectiveness.
The Financial Conduct Authority’s (‘FCA’) intentions under the Financial Services and Markets Act 2000 (‘FSMA’) is to ensure that relevant markets function well and the operational objectives are:
FCA to regulate BNPL arrangements following publication of the Woolard review of unsecured credit
Pre-paid funeral plans will soon become the responsibility of the Financial Conduct Authority (FCA) adding the sector to its supervisions by July 2022. The pre-paid funeral plan sector was previously unregulated but was formally supervised by the Funeral Planning Authority (FPA) an association which funeral plan providers could be elective members of.
The Financial Conduct Authority has announced proposals for all claims management companies to be subject to a cap on the level of fees they can charge their customers.
The Financial Conduct Authority writes regular ‘portfolio letters’, where it sets out what it sees as the key risks affecting a particular sector. The latest such letter concerns debt purchasers, debt collectors and debt administrators.
Regulated firms should be aware of a new Financial Services Bill which is making its way through Parliament. The Bill includes provisions which grants new powers to the Financial Conduct Authority (FCA) to take quicker action with unused regulatory permissions that firms hold.
Financial firms are encouraged to review their current permissions to ensure they are correct. Some firms have retained permissions they no longer require such as Limited Permission Credit Brokers who have discontinued their ancillary credit broking activity. Furthermore, Insurance brokers who have permission to advise on insurance products may find their service does not constitute as providing advice, as such the FCA will obtain further powers to reduce the amount of unused or incorrectly sought after permissions.
Once the Bill is ratified the FCA will be able to serve notice to firms under its supervision that it suspects as not utilising one or more permissions. The FCA will give 14 days for firms to respond to its letter and where the firm fails to provide an answer the FCA will publish a public notice summarising that the firm in question is not using a certain permission(s). If the firm fails to provide satisfactory evidence to the contrary the FCA can vary or cancel the firm’s permissions after 1 month.
The Bill will reduce the length of time to action and the increases the power of the regulator which previously had to communicate with firms regularly to encourage a variation of permissions (VOP) application in order to remove certain permissions. In some cases where a firm is uncooperative with the regulator, the FCA would remove the permission itself or revoke the firm’s authorisation.
In anticipation of these incoming powers the FCA has encouraged all firms to review their regulatory permissions and to ‘use it or lose it’[i] as the FCA has succinctly instructed. Firms should apply for a VOP in instances where they find a permission no longer necessary to avoid FCA intervention.
The FCA has cited several beneficial reasons for firms to remove unused permissions as such as helping to assure firms meet their threshold conditions, reducing the risk of mis-leading customers, and remove the cost of paying unnecessary fees for unused permissions.[ii]
Would your firm like assistance with a variation of permission application? Or would you like expert advice on whether you still require a certain permission? Scott Robert can help and we would be happy to assist. Contact us today.
For a long time, 25 years was the traditional mortgage term. Now, however, the majority of first-time buyers are taking mortgages with terms of longer than 25 years.